The Goldman Sachs Group (NYSE:GS) Stock Falls 1.7% on Analyst Downgrade

Key Points

• Goldman Sachs shares fell 1.7% after Citigroup cut its price target from $1,050 to $1,000 and maintained a Neutral rating. The stock traded as low as $866, with trading volume 52% above its average.
• Despite the decline, Goldman reported strong third-quarter results, including $17.01 EPS and $18.68 billion in revenue, both well above estimates. Net income rose 29% year over year, driven by gains in equities and investment-banking revenue.
• The company declared a $5 quarterly dividend, or $20 annually, but analysts remain cautious: Goldman’s consensus rating is Hold, with concerns about weaker fixed-income trading, elevated interest rates and limited further valuation upside.

The Goldman Sachs Group, Inc. (NYSE:GS - Get Free Report)'s stock price traded down 1.7% on Wednesday after Citigroup lowered their price target on the stock from $1,050.00 to $1,000.00. Citigroup currently has a neutral rating on the stock. The Goldman Sachs Group traded as low as $866.00 and last traded at $877.0710. Approximately 3,365,753 shares changed hands during mid-day trading, an increase of 52% from the average daily volume of 2,219,367 shares. The stock had previously closed at $891.91.

GS has been the topic of several other research reports. Loop Capital set a $1,050.00 price target on shares of The Goldman Sachs Group in a research report on Thursday, October 8th. HSBC increased their price target on The Goldman Sachs Group from $995.00 to $1,007.00 and gave the stock a "hold" rating in a research note on Monday, September 28th. Bank of America lifted their price objective on shares of The Goldman Sachs Group from $1,150.00 to $1,300.00 and gave the company a "buy" rating in a research note on Thursday, July 16th. BMO Capital Markets decreased their price target on The Goldman Sachs Group from $972.00 to $970.00 and set a "market perform" rating on the stock in a research report on Tuesday, October 6th. Finally, Rothschild & Co Redburn lifted their price objective on The Goldman Sachs Group from $870.00 to $920.00 and gave the company a "neutral" rating in a research note on Thursday, June 25th. One research analyst has rated the stock with a Strong Buy rating, nine have assigned a Buy rating, thirteen have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, The Goldman Sachs Group presently has a consensus rating of "Hold" and a consensus target price of $1,050.55.

Key The Goldman Sachs Group News

Here are the key news stories impacting The Goldman Sachs Group this week:

• Positive Sentiment: Strong Q3 results: Goldman reported $17.01 in diluted EPS and $18.68 billion in revenue, well above estimates of $12.86 EPS and $16.83 billion in revenue. Net income rose 29% year over year, supported by a 72% jump in equities revenue to $6.44 billion and a 21% increase in investment-banking fees. Reuters earnings report
• Positive Sentiment: Capital returns and business momentum: The board declared a $5 quarterly dividend, equivalent to $20 annually, while Goldman returned $4.49 billion to common shareholders during the quarter, including $3 billion in repurchases. CEO David Solomon also emphasized the firm’s diversified business, record wealth-management assets and favorable dealmaking environment. CNBC interview with David Solomon
• Neutral Sentiment: Mixed trading outlook: Equities and investment banking were strong, but fixed-income and rates trading fell short of expectations. Solomon said abrupt interest-rate moves could create headwinds even as he characterized the underlying economy and market environment as resilient. Benzinga CEO outlook
• Negative Sentiment: Price-target reductions: Citigroup cut its target to $1,000 from $1,050 and assigned a Neutral rating, while RBC reduced its target to $1,010 from $1,220 and maintained Sector Perform. The revisions suggest analysts believe much of Goldman’s earnings strength is already reflected in the valuation. Analyst price-target revisions
• Negative Sentiment: Macro and regulatory pressure: Hotter-than-expected inflation has reinforced concerns that interest rates could remain elevated, weighing on financial stocks. Separately, a Treasury review found that large U.S. banks’ reputation-risk policies could allow political considerations to influence access to banking services, creating potential regulatory and reputational risks for Goldman. CNBC Treasury report

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Lodestone Wealth Management LLC raised its holdings in shares of The Goldman Sachs Group by 45.5% during the third quarter. Lodestone Wealth Management LLC now owns 96 shares of the investment management company's stock valued at $86,000 after acquiring an additional 30 shares in the last quarter. N10 Wealth LLC purchased a new stake in shares of The Goldman Sachs Group in the 3rd quarter worth approximately $615,000. Nicollet Investment Management Inc. increased its holdings in shares of The Goldman Sachs Group by 0.9% during the third quarter. Nicollet Investment Management Inc. now owns 4,582 shares of the investment management company's stock valued at $4,125,000 after acquiring an additional 41 shares in the last quarter. ABLE Financial Group LLC increased its stake in The Goldman Sachs Group by 5.8% during the 3rd quarter. ABLE Financial Group LLC now owns 599 shares of the investment management company's stock valued at $539,000 after purchasing an additional 33 shares in the last quarter. Finally, First Citizens Bank & Trust Co. increased its position in shares of The Goldman Sachs Group by 76.4% during the third quarter. First Citizens Bank & Trust Co. now owns 5,976 shares of the investment management company's stock valued at $5,381,000 after acquiring an additional 2,588 shares in the last quarter. Institutional investors own 71.21% of the company's stock.

The Goldman Sachs Group Stock Down 1.7%

The company has a 50 day moving average price of $984.44 and a two-hundred day moving average price of $989.10. The company has a debt-to-equity ratio of 3.17, a current ratio of 0.63 and a quick ratio of 0.63. The stock has a market cap of $255.38 billion, a PE ratio of 13.54, a PEG ratio of 0.98 and a beta of 1.29.

The Goldman Sachs Group (NYSE:GS - Get Free Report) last announced its quarterly earnings results on Tuesday, October 13th. The investment management company reported $17.01 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $12.86 by $4.15. The firm had revenue of $18.68 billion for the quarter, compared to the consensus estimate of $16.83 billion. The Goldman Sachs Group had a net margin of 15.53% and a return on equity of 19.16%. The business's quarterly revenue was up 23.0% compared to the same quarter last year. During the same quarter last year, the firm posted $12.25 EPS. Analysts expect that The Goldman Sachs Group, Inc. will post 67.48 EPS for the current year.

The Goldman Sachs Group Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, December 30th. Shareholders of record on Wednesday, December 2nd will be given a $5.00 dividend. This represents a $20.00 annualized dividend and a yield of 2.3%. The ex-dividend date of this dividend is Wednesday, December 2nd. The Goldman Sachs Group's dividend payout ratio (DPR) is presently 30.87%.

About The Goldman Sachs Group

The Goldman Sachs Group, Inc is a global financial services company headquartered in New York City. Founded in 1869, the firm provides services to corporations, financial institutions, governments, individuals and other clients through its investment banking, markets, asset management and wealth management businesses.

Goldman Sachs advises clients on mergers and acquisitions, financing and other strategic transactions, and facilitates trading in equities, fixed income, currencies and commodities.

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